When a dragon hatches, can it understand Draconic? Or does it need to be taught?
Original edition D&D sources do not address this question, treating dragons primarily as distinct sets of combat statistics. Advanced Dungeons & Dragons 1st Edition simply gave each type of dragon a percentage “chance to speak” without regard to age.
In Advanced Dungeons & Dragons 2nd Edition, it is implied that all dragons “speak their own tongue”, and even hatchlings may have the ability to communicate:
White dragons speak their own tongue, a tongue common to all evil dragons, and 7% of hatchling white dragons have an ability to communicate with any intelligent creature. The chance to possess this ability increases 5% per age category of the dragon.
But the 1990 Draconomicon for Advanced Dungeons & Dragons 2nd Edition introduced biology and ecology for dragons. There it is explicitly stated that a dragon must learn Draconic:
Language is also an acquired attribute. Like any other intelligent creature, dragons can acquire a language only from another creature who speaks that language. Thus it is quite possible for a copper dragon never to learn the copper tongue. Dragons raised by humans generally learn only the common tongue, unless their parent is proficient in other languages (and wishes to teach them).
However, there was a transition in later editions. This began with a partial shift in 1994’s Council of Wyrms adventure module. That module introduced “prenatal learning”: a dragon would learn language during the long incubation period.
Dragons instinctively know a select number of combat and noncombat proficiencies upon hatching, as per the rules in Book One. Dragons learn some of these proficiencies subliminally as they grow within their eggs. They learn the modern-languages proficiency, for example, by listening to the sounds of dragon speech that filter in through their shells.
Then with 3rd Edition’s 2003 Draconomicon: The Book of Dragons, the concept of “inherited knowledge” was introduced:
A wyrmling emerges from its egg fully formed and ready to face life. From the tip of its nose to the end of its tail, it is about twice as long as the egg that held it.
A newly hatched dragon emerges from its egg cramped and sodden. After about an hour, it is ready to fly, fight, and reason. It inherits a considerable body of practical knowledge from its parents, though such inherent knowledge often lies buried in the wyrmling’s memory, unnoticed and unused until it is needed.
4th Edition’s 2008 Draconomicon: Chromatic Dragons doubles-down on this concept and ties it to limited inherited memory:
A newly hatched dragon has a full array of abilities. Although inferior to those of a young dragon, these abilities are sufficient for the wyrmling to take care of itself, at least against relatively weak threats and predators. Although an emerging wyrmling is sodden and somewhat awkward, it can run within hours of hatching and can fly within a day or two. A wyrmling’s senses are fully acute, and—due to the interweaving of a dragon’s centers of memory and instinct—it is born with a substantial amount of its parents’ knowledge imprinted in its mind.
Even so, a dragon is not born with the full memories of prior generations. Rather, a wyrmling has a grasp of the generalities of the world and of its own identity. It knows how to move, how to use its innate abilities, who and what its parents are, and—perhaps most important—how to view the world around it.
Furthermore, 3rd Edition’s Monster Manual simply says,
All dragons speak Draconic.
And further editions always include the ability to speak Draconic in stat blocks, including those for wyrmlings.
It seems not uncommon for eggs to hatch after abandonment:
White dragon eggs had to be buried in snow or encased in ice while incubating. The parents did not bother to tend or protect the eggs in any way, although they would usually lay them near their lairs.
Young adults, particularly evil or less intelligent ones, tend to lay annual clutches of eggs all around the countryside, leaving their offspring to fend for themselves.
… [Y]ounger dragons most often part after mating and leave their eggs untended.
— Draconomicon: The Book of Dragons (2003)
Given that, along with in-game rules stating that wyrmlings speak Draconic, we can infer that wyrmlings must gain language understanding without instruction.
Finally, the 5th edition sourcebook Fizban’s Treasury of Dragons goes further and introduces the concept of the “First World”:
The elegy suggests that before the myriad worlds of the Material Plane came into being, before Oerth and Toril and Eberron and Krynn existed, the primordial dragons—Bahamut and Tiamat—worked together to create the Material Plane in the form of a single First World. All the worlds that now constitute the plane are, in the words of the poem, “seedling realities” formed when the First World was sundered in some unexplained catastrophe.
And furthermore that all dragons are mystically linked to other incarnations:
Dragons’ unique connection to the magic of the Material Plane and the history of the First World gives them a mysterious link to other dragons across the myriad worlds of the Material Plane. … Occasionally, dragons develop a sense known as dragonsight—an awareness of multiple incarnations of themselves across different worlds of the Material Plane.
This provides yet another possibility for Draconic language acquisition: it is magically innate to dragons.
In conclusion, a recently hatched wyrmling ought to understand and speak Draconic due to: